The increased use of generic drugs in Ireland has so far not led to substantial savings for patients or the State because the price of such products here tends to be similar to the price of branded drugs, a new report has revealed.

The report from the Economic and Social Research Institute (ESRI) looks at pharmaceutical prices, prescribing practices and the use of generics in Ireland in comparison with other EU member states and OECD countries.

It shows that in comparison to other EU member states, the price of generic drugs and in-patent drugs is higher here, while the price of drugs that are off-patent is lower.

The report points out that ‘increased generic penetration has not led, up until now, to substantial savings for the State or the cash-paying patient'.

"This reflects the fact that, in contrast to much of the EU, generic prices tend to be similar to those of the brand name manufacturer," the ESRI said.

However, the Health (Pricing and Supply of Medical Goods) Act 2013, which formally came into operation this week, may change this.

Currently, when a specific brand of medicine is prescribed for a patient, a pharmacist can only supply that particular brand, even when less expensive generic versions of the same drug are available.

The Act will permit pharmacists to substitute medicines prescribed, provided that they have been designated as safely interchangeable by the Irish Medicines Board. This law is aimed at encouraging more generic prescribing It will be backed up by a system of reference pricing for drugs under State schemes.

Under reference pricing, specific price limits for many drugs will be set by the HSE, above which it will not cover the cost of these medicines under State schemes.

It is expected that the first list of interchangeable medicines will be produced by mid-August and from the end of the year, thousands of prescriptions will be subject to generic substitution.

According to the ESRI, this law ‘holds out the possibility of radically changing the way in which pharmaceutical prices are set in Ireland'.

However, it warned that a ‘lack of clarity and precision as to how prices will be set under the Act means that it is not possible to predict with any certainty that pharmaceutical prices in Ireland will fall vis-à-vis other countries'.

Under the new law generic substitution will be backed up by a system of reference pricing, where a proce for specific drug will be set by the HSE above which it will not cover the cost under State schemes.

Meanwhile the report also revealed that where prescribers in Ireland have a choice between different drugs within any of the three therapeutic sub-groups - statins proton pump inhibitors and ACE inhibitors - ‘they tend to select the most expensive pharmaceutical product'.

"In contrast, prescribers in the UK tend to prescribe the least expensive pharmaceutical product within each of the three therapeutic sub-groups," it noted.

Statins are used in the treatment of high cholesterol, proton pump inhibitors are used to treat stomach acid and ACE inhibitors are used mainly in the treatment of high blood pressure and heart failure.

The report, Ireland: Pharmaceutical Prices, Prescribing Practices and Usage of Generics in a Comparative Context, is based on the latest HSE data for Ireland, along with comparable data from other countries.

New generic drug law